How profitable is Forex trading?

Content by Fineco's partner

How profitable is Forex trading?How profitable is Forex trading?How profitable is Forex trading?

Is Forex trading still profitable? What is the average profit in the Forex market?


Forex, forex trading Investment opportunities Forex market Trade on currencies Market liquidity

2 min reading

Is Forex trading still profitable?

If you are a new investor, it’s normal to ask yourself if Forex trading is profitable, given all the news regarding the risk level, the high percentage of traders losing money and the difficulties of trading on the foreign exchange market. Forex’s market has maintained exponential growth since its origin and attracts more and more investors.

To start trading, you must have some basic knowledge of the currencies market. Therefore, you must try to obtain as much information regarding the market as you can to acquire acquiring knowledge and skills that will allow you to create strategies and have data that will be useful for you to improve your investments.

How to trade on Forex?

Investing in Forex can be very profitable, but it all depends on the investor’s level of experience and on its negotiating skills. If you are a Forex trader that knows how to apply the right strategies, this market can be very rewarding. However, in order to do this, you must devote a lot of time to it and learn how to trade on currencies.

Forex requires practice, study and dedication, as well as being able to carry out a good market analysis.

A tip: if you’re just starting out, invest small amounts, then when you have more practice and you know how to trade on Forex, you can invest a little bit more. Remember that Forex is a very liquid market but it’s also very volatile. Therefore, you can earn a lot but also lose a lot.

What is the average profit for trading on Forex?

This is the question that every trader asks themselves when they are first faced with the world of Forex trading. There is no definitive answer but there are various parameters that must be taken into consideration. However, we can think in percentage terms by analysing the trading methods offered by the Forex market.

On average, with a long-term operation, a professional trader is able to obtain monthly performances of 5% to 7%, excluding drawdown periods, not calculating taxes and with a starting capital of around £1700.

With intraday or scalping operations, the profit margin goes up considerably, but it requires more discipline and better technical training. If you decide to use a scalping strategy, you can earn more even with modest capital investment.

Trading Forex vs trading stocks: which is more lucrative?

Now we will compare trading Forex vs trading stocks to understand which is more profitable. Trading Forex involves much more financial leverage and less regulation compared to trading stocks, which makes it highly profitable but also riskier. Monitoring the Forex market is often easier than monitoring stock markets since there are only 18 common currency pairs to trade as opposed to thousands of potential stocks. A disadvantage of Forex trading compared to trading stocks is that it takes place 24 hours a day. This means that you could be forced to work at not convenient times to make certain exchanges.

Forex and trading stocks are very different types of trading based on short-term stock prices. For this reason, when choosing between stocks and Forex, you must choose wisely based on your objectives, disposable income and your tolerance for taking risks.

Information or views expressed should not be taken as any kind of recommendation or forecast. All trading involves risks, losses can exceed deposits.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63.13 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Before trading CFDs, please read carefully the Key Information Documents (KIDs) available on the website

Fineco Newsroom is a compilation of articles written by our editorial partners. Fineco is not responsible for an article's content and its accuracy nor for the information contained in the online articles linked.

These articles are provided for information only, these are not intended to be personal recommendations on financial instruments, products or financial strategies.

If you’re looking for this kind of information or support, you should seek advice from a qualified investment advisor.

Some of the articles you will find on the Newsroom feature data and information from past years. As per the very nature of the content we feature in this section of our website, some pieces of information provided might be not up to date and reliable anymore.

This advertising message is for promotional purposes only. To view all the terms and conditions for the advertised services, please refer to the fact sheets and documentation required under current regulations. All services require the client to open a Fineco current account. All products and services offered are dedicated to Fineco account.